The empirical link between entry mode selection and barriers to internationalisation

Abstract

This study examines the impact that various barriers to internationalization have on entry mode selection for Australian firms entering foreign markets. The study considers a comprehensive set of potential barriers to internationalization identified from the literature and the four major market entry modes. The study was based on an empirical investigation of Australian firms that had operations in foreign markets. The sample of firms came from a wide cross section of industries. The list of firms comprising the sample was provided by a state government department. The findings indicate that venture management characteristics, distribution access, foreign practices incompatible with domestic business, adapting to foreign market needs and foreign market attractiveness as barriers to internalization were the significant determinants of entry mode selection for direct exporters, joint ventures, contract manufacturers and wholly owned subsidiaries.